The Peripatetic Headquarters Edition

Summary

Slate Money: The Peripatetic Headquarters Edition

Podcast: Slate Money
Date: September 9, 2017
Host: Felix Salmon (Fusion)
Guests: Anna Szymanski, Jordan Weissmann, Jacob Weisberg (Chairman of the Slate Group)

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Episode Overview

This episode unpacks major business and finance stories of the week, diving into the economics of concert ticket scalping (with a focus on Taylor Swift's "Verified Fan" initiative), the changing models for monetizing media (subscriber models, nonprofit arms), and the nationwide competition for Amazon’s new headquarters. The discussion is lively and sharp, mixing analysis with pointed humor and debate.

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Key Discussion Points & Insights

1. Taylor Swift, Ticket Scalping, and Verified Fans

(00:09–17:04)

• Overview:
  The hosts explore the persistent issue of scalpers dominating ticket sales for major artists like Taylor Swift and the new approaches being used to combat it.

• Ticket Scalping Schemes:

  • Example given of Craig Carton’s Ponzi scheme—claiming industry connections to buy tickets at a discount and resell​​ (04:04).
  • Scalping described as “arbitrage” or “price discovery,” but with a bad reputation (05:43).

• Ticketmaster's Role:

  • Ticketmaster criticized for selling only a small fraction of tickets at face value, moving many to its own resale platforms at market rates (06:02).
  • Quote: “You feel like you’ve been mugged... not just as if the whole system involved, the fees are really high and there’s just this kind of shadow.” – Jacob Weisberg [12:38]

• Taylor Swift's Tactics:

  • Utilizes Ticketmaster’s "Verified Fan" system but adds her own requirements, rewarding superfans who engage with her brand on social media, buy merch, and drive up her stats for better access to tickets (09:08–10:25).
  • Criticism that it's more about monetizing fandom than pure fan access.
  • Memorable Quote: “The way you really get the points is by spending money.” – Felix Salmon [10:32]

• Ethical and Business Concerns:

  • Debate over whether it’s better for money to go to artists than scalpers.
  • Springsteen contrasted with Swift: Springsteen aims to play for all fans, not just wealthier ones (12:07).

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2. The Evolution of Media Revenue Models

(17:04–30:43)

• Traditional vs. Modern Media Funding:

  • Jacob Weisberg outlines the decline of traditional media revenue, with ad dollars shrinking and audiences conditioned to expect free online content (17:25–19:00).

• Recent Sales of Legacy Brands:

  • Washington Post (bought by Jeff Bezos), The Atlantic (Lorraine Powell Jobs/Emerson Collective), New York Daily News (Tronc), and the erosion in value for these storied names (19:00–21:49).
    • “Owning publishing enterprises… has always been about an element of vanity and political influence… even if they never make money.” – Jacob Weisberg [23:02]

• Subscription, Membership, and Nonprofit Models:

  • Surat shift to direct-from-reader revenue (memberships like Slate Plus and The Guardian’s 501(c)3 nonprofit status).
  • Slate Plus: Not a hard paywall, but a membership offering benefits and ad-free content.
    • Quote: “We want people to support us because it’s a virtuous thing to do and because they’ll get things they want to have.” – Jacob Weisberg [30:11]

• The “Fan Club” Analogy:

  • Comparison to arts organizations like the Public Theater, which prioritize members for tickets—a model the group muses could work for other industries (15:09–16:56).

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3. Amazon’s Bidding War: The Peripatetic Headquarters

(30:43–42:14)

• Amazon’s HQ Competition:

  • Cities across North America compete for Amazon’s second HQ, with promises of tens of thousands of jobs and billions in investment (31:36).
  • Concerns about "race to the bottom" bidding, tax incentives, and the ethics of pitting cities against each other for corporate favor.

• Discussion — Feasibility and Motivation:

  • Skepticism about whether dual headquarters is efficient. Comparisons to other multihub companies like Unilever and Thomson Reuters, with consensus that split HQs often create inefficiency and executive travel nightmares (33:59).

• Economic and Urban Impact:

  • Critical look at cities making major concessions for potential gains, and the possible distortion in labor markets or real estate (36:17–38:15).
  • “When you politicize this and you force a bunch of cities and states to come groveling to you… is that a great look?” – Felix Salmon [37:11]

• Speculation — Which City Will Win?:

  • Guesses range from Toronto to Austin to Baltimore, weighing infrastructure, costs, and strategic benefits (39:52–41:20).
  • Dismissal of Toronto based on "optics"—unlikely Amazon would make U.S. mayors compete only to select a Canadian city (41:24).

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Notable Quotes & Memorable Moments

• “You put all of the effort into doing it and then you’re like, now I have this endowment effect and I’m not going to sell my ticket…” – Felix Salmon (on Taylor Swift’s Verified Fan system, [09:12])
• “It’s all about the scale of losses.” – Jacob Weisberg (on why wealthy individuals buy unprofitable media properties, [23:02])
• “We have both angles working in our favor… an element of conscience [and] a value proposition” – Jacob Weisberg on Slate Plus [29:27]
• “There's a Hunger Games aspect of it that's not ideal” – Anna Szymanski on cities competing for Amazon HQ [37:34]

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Timestamps by Segment

| Timestamp | Segment / Key Topic | |-----------|---------------------------------------------------------------------------| | 00:09–17:04 | Taylor Swift, ticket scalping, Ticketmaster, Verified Fan innovations | | 17:04–30:43 | Media funding models: subscriptions, memberships, legacy print sales | | 30:43–42:14 | Amazon HQ2 "Hunger Games", regional economics, speculation | | 42:14–46:47 | “Numbers Round” — striking recent statistics from business/media |

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Numbers Round — Quick Hits

(42:14–46:47)

• $2.29 — Per-pound price for organic chicken at Whole Foods after Amazon acquisition (Jacob Weisberg [42:21])
• 6.3 million — Tax bill that shuttered independent Cambodian newspaper (Anna Szymanski [42:59])
• $2.2 billion — Price for the Houston Rockets NBA team, a sports franchise record (Felix Salmon [43:57])
• 257 million — Filecoin raised this in its ICO, raising ICO market concerns (Jordan Weissmann [45:13])

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Tone & Style

The episode is conversational, witty, and slightly irreverent—balancing robust economic and business analysis with casual anecdotes and friendly banter. The hosts aren’t afraid to be critical of industry practices or poke fun at one another.

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For Listeners Who Missed the Episode

This episode offers a smart primer on the economics of event ticketing, the ongoing reinvention of media business models, and the realpolitik behind Amazon's high-stakes headquarters search. You'll hear not just facts but pointed debate about the ethical and practical consequences of how money flows in media, music, and tech. Notable moments include sharp critiques of Ticketmaster's practices and Amazon's HQ "Hunger Games," plus real talk about whether new funding models for journalism are sustainable.

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Memorable outro: Felix and crew riffing on Taylor Swift’s “Look What You Made Me Do,” bringing things full circle with humor and pop culture flair.

Transcript

[A]

The following podcast contains explicit language.

[B]

Hello, and welcome to the everything you ever wanted to know about Taylor Swift edition of Slate Money with our resident Taylor Swift expert, Mr. Jacob Weisberg. This is going to be amazingly fun, not only because we have Jacob Weisberg here, who knows more about Taylor Swift than anyone else I know.

[A]

I think fuck all is the technical term.

[B]

Taylor, you have two teenagers. I mean, Jacob, you have two teenagers, nine of whom is called Taylor.

[A]

Yeah, no, we didn't name either of them after Taylor. Although even that does work for either gender. My teenagers have had no interest in Taylor Swift. My 18 year old daughter has not been interested in Taylor Swift. What can I say?

[B]

I've been looking to look what you'd made me do on like, repeat.

[C]

Wait, really? Who do you have a feud with that you're like imagining? Like, who is your. Who are you putting in place in place of Kanye?

[B]

I'm a fan. I can say soon to be a super fan. No, we are actually gonna be talking about Taylor Swift, her mechanism for trying to circumvent the scalpers. This is a issue which has been around for a long time. She has a bright idea. We'll talk about that. We're going to talk about 8 million square feet of new Amazon headquarters and where they might go.

[C]

Yeah.

[B]

And because Jacob Weisberg is. Oh, Jacob, you should probably introduce yourself. You're like our boss.

[A]

But not really.

[B]

But not really.

[A]

I'm chairman of the Slate group, which includes Slate and Panoply and. And as part of that, a big part of my job has been developing all of the podcasting we're doing. But I'm mainly just a listener of yours, Felix. I would never. I would never call myself your boss.

[B]

I feel like if there's a Panoply show with Slate in the title, then you're like doubly involved.

[A]

Yeah, we don't necessarily need to sort all that out right now. It doesn't really matter to listeners what what the marquee is.

[B]

Right. So, okay, so we are. So. I am Felix Salmon of Fusion. Anna Shymansky is here.

[D]

Hello.

[B]

Jordan Weissman of Slate is.

[C]

Hey, everyone.

[B]

And we are going to be talking about media because Jacob has been a media executive for some time, knows his way around that world even better than he knows his way around the world of Taylor Swift. And there are some big old legacy media brands which have been sold of late. And we'll see what's happening with those. We might even get a plugin for Slate. Plus, this is how we managed to get Jacob into the into the show is by promising him that we would plug Slate. Plus we're gonna talk about media models, sponsorship models, revenue diversification, all of that kind of thing. But really I want to talk about Taylor Swift.

[D]

As well you should.

[C]

Let's get going.

[B]

So what has she gone done now?

[C]

Look what the scalpers made her do. So yeah, Taylor Swift is coming out with a new album for better or worse.

[B]

Reputation.

[C]

Yes, reputation. Her just the cry of her resentful ID towards. But anyway, so of course she's also going on a tour soon to back that album. And anytime an artist like Taylor Swift goes well, there's no one quite like Taylor Swift.

[B]

She's unique.

[C]

She's unique. There's no one like her in the world. But of her, of her star power goes on tour, scalping becomes a huge, huge issue. People want to buy up as many tickets as they can using bots, whatnot, and sell them on the secondary market, making it impossible for normal fans to get into these shows for a reasonable price.

[B]

And this is, this is such a thing. So there is a weird sort of tabloid news hook here, which is the sports radio guy, what was his name?

[C]

Oh, I forget, is it.

[D]

His last name's Carton.

[B]

Carton. He has this sports radio show called Carton and Esiason, something like that.

[C]

Boomer Esiason. Boomer Esiason is in the former quarterback, but you don't know sports ball. But okay, anyway, continue.

[B]

And anyway, half of this twosome was arrested by the SEC for basically creating a Ponzi scheme. But at the heart of a Ponzi scheme was a seemingly legitimate plan that he had to buy up a bunch of Taylor Swift tickets and Katy Perry tickets and various other sort of high profile concert tickets at face value from concert promoters and then turn around and sell them at a profit.

[C]

My impression was actually it was. He was. It was a little less legit than.

[B]

Oh, it was totally not legit, seemingly.

[C]

Legit, even less so.

[A]

He.

[C]

That would have actually made sense as a plan because he was. If you had said I was going to buy them at face value, it's like, well, yeah, you can buy tickets at face value. But apparently what he was telling his would be investors was that he had inside connections in the industry that he could get them as a discount and then have some sort of discount ticket service.

[B]

So, but, but he, but in any case, it was scalping was he wanted to create a kind of legal scalping thing and he managed to get like genuine legitimate hedge funds to give him $10 million because he. There is so much money in scalping. Legit scalping.

[C]

Yeah. It's enormous. And so Ticketmaster, which hedge fund strategy is that?

[B]

I want to know. Of course, like, this didn't work, mainly because he never actually bought any tickets, mainly because he didn't actually have any contacts in the music industry, but he.

[D]

Had a lot of gambling debts.

[A]

Hedge fund people presumably understand that scalping is a bad name for something called arbitrage, which is one of the ways they often make money.

[B]

Or what's also known as price discovery.

[C]

Yes. Yeah. That's how you find who really values the resources. Price gouging also.

[B]

So, anyway, so Ticketmaster, you're right about Ticketmaster, is one of the most conflicted actors in this whole sordid story, because on the one hand, they don't want to be completely evil, but on the other hand, they're completely evil and they increasingly. And I remember going, doing a bit of a deep dive into this during, like, one of the LCD sound system farewell tours, that what they do when they sell tickets to a show is they actually sell a tiny, tiny percentage of tickets to the show. And when people say the show sold out in five minutes, or whatever it is, that's because they only sold seven tickets. And then the rest of the tickets get quietly transferred over to TicketMaster's sister site, StubHub, and sold at more or less market rate.

[C]

So it isn't StubHub owned by eBay, though. I think it's. Are they actually related in any way?

[B]

Aren't they related?

[C]

I don't think they. I don't think they are. I think they're our own. I think that's a.

[B]

Well, Ticketmaster has its own.

[C]

They have their own secondary site.

[B]

They have their own secondary site.

[C]

Yeah, that's. I think that that sounds right.

[B]

But in any case, the promoter who ultimately controls the tickets winds up selling more tickets on places like Ticketmaster secondary site and on StubHub than they do actually through the box.

[D]

Again, because ultimately, the problem that we always have with this type of market is that you have a product that is not being priced at the market rate. It is being kept artificially low because no artist wants to actually charge what it would cost. But then the problem is that anytime you do that, you create either a black market or a secondary market because.

[C]

You can't amp up supply infinitely. There's no way you can't increase.

[B]

So Taylor Swift has what I think is one of the more interesting solutions to this.

[C]

This is Ticketmaster solution that Taylor Swift then customized yeah. But anyway, go on. Yeah.

[B]

So the way that this, that people like Nike have tried to get around this problem when they're selling limited edition sneakers is not to, you know, do the obvious thing, which is to not make the sneakers limited edition and just sell as many as people want, but rather it's to create a whole bunch of hoops that people have to jump through in order to be able to be eligible to buy the sneakers. You know, and you start with simple captures and things which try and kill the bots, but whenever you, whatever you do, the scalpers and the bots find a way around it. So what the new idea is is that you actually really genuinely make people prove that they're human fans. Not by trying to fill out forms or standing in line or whatever, because all of that gets gamed, but rather just by being fans and by posting about your fandom on, on social media and by buying T shirts and albums and being like a superfan. And the more of that you do, the more points you get. And the more points you get, the more likely you are to be able to buy tickets. And the people who jump through those hoops and end up buying a ticket at the end of the day turn out not to flip their tickets to StubHub that often.

[A]

Yeah, it's like bitcoin mining.

[C]

It is.

[B]

You put all of the effort into doing it and then you're like, oh, now, now I've. Now I have this like, endowment effect and I'm not going to sell my ticket, even though I could.

[D]

And even just the Verified fan program, even before Taylor Swift kind of added her additional color to was, it was going from about, you know, 50% or more tickets showing up in the secondary market to something like 5% showing up. So it's significant.

[C]

It was pretty successful. And so here's the thing. So Ticketmaster has Verified Fan program. It's created and they've done it with a few artists. Bruce Springsteen tried it out. Hamilton, I believe, did it. And there weren't a lot of complaints because, you know, the fan verification process actually didn't involve that many hoops. It was relatively smooth. You didn't have to buy too much merch or anything like that. Taylor Swift, on the other hand, decided to incorporate it into her kind of PR machine for the release of this album. So you got more points for doing things like taking a picture of the branded reputation. The reputation, branded UPS trucks that were driving around cities and posting on social media. If you listen to her, like, video five times a day on YouTube, driving up, you know, driving up its view count and getting her up the Billboard charts. How.

[A]

How Felix got his ticket.

[C]

Yeah, exactly. This is just. You put it on repeat, you know, you got, you. You got more points that way. If you bought her album, you got more points that way.

[B]

And to be, you know, and the criticism was that it's not just about throwing up hashtags on social media. The way you really get the points is by spending money.

[D]

But I don't see what's wrong with that because ultimately we have a market here where we had a lot of money that was not going to the artists, was not going to the record company, was not going to any body that was actually creating content or value, simply going to middleman.

[B]

I feel like the record company and the concert promoters like to pretend that that money doesn't go to them. But as I say, I feel that behind the scenes, in fact, a lot of the money used to actually wind up going to them.

[D]

That's fair enough. But here again, I would rather have this money going to Taylor Swift than going to some guy in New Jersey who's reselling tickets.

[C]

So I think, again, you kind of have to contrast it with the other dry runs they've done of this verified fan system, where, again, they weren't quite as geared towards getting you to buy merch and they seemed to succeed. Right. You said other versions before Taylor Swift had, you know, knock down the number of tickets on the secondary market to like 5% or something, at least the ones that were sold through this program. So it's possible to do this without saying you have to buy my T shirt and my album and, you know, do the presale and yada yada, yada. So I think that's that. That's where some of the frustration comes. But the, you know, is it wrong? I don't think it's wrong. It's just if you're a pop star, image is everything. And right now, Taylor Swift is more and more making herself look like part, you know, making herself look like just sort of this, you know, uber capitalist.

[D]

I guess, unlike all those other artists who are all just socialists like that.

[B]

I guess so. No, but that's the, that's the whole. I mean, Taylor Swift is fine being a capitalist, right? She owns her own record label. This is all part of her thing. And she's never been shy about. I'm a very successful recording artist. You move over to someone like Bruce Springsteen who's all like, man of the working people, and then it becomes much more, you Know, I am already very rich and I don't actually want to extract maximum dollars from my fans when I go out on tour. I to play for my biggest fans, whether they are rich or not. And it becomes harder for him, but.

[A]

He sort of managed to do that, right? I mean, the tickets were still pretty expensive, but I gathered I missed the lottery. I would have entered it, but I gather that people felt like they had a fair shake. I mean, part of the problem is that, you know, when you buy tickets from Ticketmaster or one of these distributors, you feel like you've been mugged. I mean, you feel like you've been mugged if you buy chamber music tickets from them. You know, it's not just as if the whole system involved, the fees are really high and there's just this kind of shadow. And if you can ever buy directly, feel like you're buying more directly from the artist or from the theater or whatever, you have a much different feeling, even if you end up paying the same price.

[B]

It's certainly true. And I don't think, I think. I feel like there's this deep disconnect between sellers and buyers when it comes to stupid compulsory fees. And so whenever you buy a ticket and Suddenly there's a 6.95 handling fee and a 7.95 shipping fee and another like, convenience fee or whatever, and the steam is coming out of your ears whenever you see these fees, much the same way as it comes out of your ears when you get charged for checking a bag on the airlines or when you go to a hotel and there's a resort fee. What is a resort fee? And normal human beings just want to be told what the price is and pay it. And someone somehow, somewhere along the line, decided that, no, the best thing to do is to quote an artificially low face value and then add a bunch of fees on top. Why does that make sense?

[D]

Because I think ultimately people will buy based on the face value price. When they're looking to buy, they don't think of all those extra things. And once they're at the point where they're actually being charged all those extra things, they're just going to continue with the purchase. So it makes total sense from a business perspective. You're going to bring them in with that artificially low price and they'll ultimately.

[B]

This is a repeat game.

[C]

Also, if you're, if you're an artist, right, or you're a venue, you don't want to be blamed for the extra cost associated with those fees. So, you know, you're sort of, you're throwing that rage all onto Ticketmaster. You're making sure that you're the person coming to see that Bruce Springsteen concert is hyper aware that Madison Square Garden did not charge you that extra 14, $20 that Ticketmaster charged you that extra $20. Whether or not that actually works, I don't know. But I feel like that's probably part of the deal or at least was back in the day that they didn't have to wrap all those extra fees into the face value of their tickets.

[A]

The I really like the membership model. I don't know if this works for Taylor.

[B]

We have a slate plus plug.

[A]

Well, you know, but it's funny, a place that does that is the Public Theater. I'm a member of the Public Theater. They did Hamilton. They do lots of great go to lots of their plays. And you pay a fee to be a member. And it's a reasonable fee. I mean, I think it's gone up to maybe $100 now. You get first crack at all their tickets and they have a couple day window when they have a play that's definitely gonna sell out. They send you an email saying, you members, if you want tickets to Hamilton or whatever it is, get them now because in two days you're gonna be competing with everybody else and their price is gonna go up and they're gonna be sold out. And so first of all, they create this group of their most loyal supporters. People who probably make contributions in excess of the membership, but people who are really interested in what they do. They prioritize their most loyal friends and fans in a way that doesn't cost them that much revenue, but kind of prioritizes all the way Taylor Swift works.

[B]

This is what in my youth used to be called a fan club.

[C]

And I mean indie bands do that too. You see that versions of that with, you know, acts that can sell out a large club but not a stadium. The problem is, I imagine scalpers would kind of price in the. Well actually could a scalper price in the cost of a fan club membership into their business?

[B]

No, I feel like they. Yeah, they circumvent the fan clubs. But I can attest from trying to deal with the Public Theater box office that the experience of buying tickets from the Public Theater if you're not a member is so unbelievably painful that I am going to become a member just to get it.

[A]

It's funny, there's a member. I always have such a good experience. Someone answers the phone, there are no wait times.

[B]

They Tell you exactly.

[A]

It works really well.

[B]

So let's take that and talk about media models, because I feel that's the perfect segue.

[A]

Totally fortuitous.

[B]

Totally fortuitous. Tell me about the importance of having a nice, predictable revenue stream from fans and members, which isn't contingent on the whims of whether or not you have a hit show or can sell a big ad deal to.

[A]

IBM feels that the strength of publishing businesses that were healthy traditionally was getting money from advertising and money from readers or from audience. And over time, a lot of these businesses, magazines in particular, came to depend almost exclusively on the advertising revenue.

[B]

Because in the 80s and even newspapers, you found that the subscription cost was invariably lower than the cost of printing and distributing. It wasn't that they got, like, profits.

[A]

From that selling newspapers for 25 cents. Right. They were boosting their circulation so they could charge more for the advertising. The readership was, in a way, a loss leader. And it was even more true at magazines and newspapers, but as you say, true at both. But after they got so dependent on advertising, subsidizing their readership, advertising went into decline. And as those numbers started to go down, lots of publishers said, wait a minute, wouldn't it be nice if we could be getting real money from our audience again? But there were some problems with that. One was that they had really, in the digital age, really trained their audiences not to expect to have to pay for content. Another was that the people were just. Had just fallen out of. Out of the habit of doing them. There's so much content for free that was so good. Why should you pay for anything? And even for many years, New York Times, for example, thought it was better off essentially not charging online, even though it's still charged in print.

[B]

So we've had. I'm gonna bring up three big sort of legacy print franchises which got sold of late. The ones which spring to mind anyway. First of all, there was the Washington Post, which used to be owned by us here at Graham holdings and is now owned by Jeff Bezos, that sold for $250 million, which to a first approximation is, you know, maybe a little bit more than the value of the money in the pension fund that he got as part of the deal. Then more recently, David Bradley, who sunk, I don't know, what, $50 million over the years, maybe more, into the Atlantic Monthly over the years, sold that to Lorraine Powell Jobs for an undisclosed sum, but I doubt it was enormous. And then very recently, we got the news that Mark Zuckerberg.

[A]

Not Mark Zuckerberg, different News.

[D]

Different Zuck.

[B]

The different Zuck sold the.

[C]

Mort Zuckerman.

[B]

Mort Zuckerman sold the New York Daily News to the gloriously named Tron. What were they thinking for basically, like, zero, but $1? There was a. There was a $30 million pension fund liability in there as well. So none of the. So what do you make of those sales? And what does it say about legacy print brands?

[A]

Well, each of those is its own story. And that precedent, Newsweek sold for a dollar. I mean, the value attached to what were once great publishing businesses is radically reduced. And as you say, in many cases, the price of these is effectively zero or some nominal amount of money. Now, I think the Daily News is sold in part because Mort Zuckerman is getting older and is ailing, and he can't really run it. Can't really run it anymore. With David Bradley, it's a story. He's concerned about the legacy of this magazine. He's essentially turning it into a nonprofit by selling it to Emerson Collective, which is Lorraine Powell. Jobs, Philanthropy. And I think the Washington Post was yet another story. I think Bezos was seen by the Graham family as someone with very deep pockets who could support the paper but also really invest the paper, which he's done. And it's created a kind of renaissance in their journalism, which is, you know, very happy, not ending to the story, but a very happy new chapter for people working at the Washington Post. Some of these are pretty optimistic scenarios, but I think what it points to is the old revenue models, the old ownership models no longer working, and the places that are figuring it out are improvising in different ways.

[B]

Well, I mean, Trunk is the old ownership model, right, of, like, having some big national conglomerate of papers, from the Chicago Tribunes, of the LA Times to the New York Daily News, and somehow trying to get synergies there. I mean, that seems the least compelling.

[C]

By far the worst of these three stories, I think. I mean, because right now it's Strat. Yeah. Its strategy is to create a national newspaper chain and somehow leverage that into better digital advertising rates, which I look at that, and I think, what's the difference between that and Gannett, right? Like, what is, you know, the owner of, like, USA Today and God knows how many metro papers, and it has just been struggling and dying and cutting down to the bone. You know, Trunk is partial. You know, and part of the reason it changed its name to Tribune Online Content or whatever was to create this impression, was going to create great, like, new tech that would somehow harvest money from this worn and kind of tired business model. So I fear for my local tabloid, basically, but I. The other two, I think, are happy stories.

[B]

So. So this is the thing. I feel like there's value in these brands, which is not, you know, and.

[D]

I'm going to their cash generation potential.

[B]

You know, you can't find it in a discounted cash flow model. Like there is value here. This is, you know, we knew all of this story when Rupert Murdoch spent $5 billion on buying the Wall Street Journal, he wasn't doing that because of a DCF model. Right. And when Maureen Powell Jobs buys the Atlantic, she's not doing it because of the DCF model. And I feel like what Jordan is saying in a little bit is what you want is to find an owner who isn't trying to obsess about cash flows.

[A]

It's all about the scale of losses. I mean, that describes more Zuckerman too. Both owning the Daily News, which was never a moneymaker, and owning the Atlantic. Owning publishing enterprises, both local newspapers and national magazines, has always been about an element of vanity political influence. People want to own these things for different reasons, but they will very often want to own them, even if they have very little hope of ever making money. I think it's all about the scale of the losses. I think when, say, David Bradley bought the Atlantic, the anticipated scale of losses was in the single millions of dollars per year. And of course, he didn't want to lose, he wanted to make a couple of million dollars a year, but he could conceive of losing that amount of money for a long period of time and getting by when you're losing the amounts of money that you can lose, particularly on a printed newspaper, which goes into the tens of millions of dollars a year. You know, the Guardian was said to lose, I think, £40 million last year. These are losses that nobody can sustain on a really ongoing, indefinite basis.

[C]

So I have a question though for you, Jacob, and I should preface this by saying I am an Atlantic alum, but it's been long enough that I have no inside knowledge whatsoever of their finances. They're claiming now that they have they're making about $10 million a year, that they actually say they're profitable. Do you believe that? I mean, you know, the story seems at least the story they've projected is that, yeah, between their digital revenue, which they say is about 80, they say digital advertising, about 80% of their revenue, which kind of is mind boggling to me if you're profitable. But then on top of that, they have their events business, which is sort of talking about changing your business model. They've. They've, you know, I assume a lot of their profits is coming from essentially running these symposiums in D.C. that people. Businesses pay a lot of money to send their people to. It seems conceivable to me that there actually, there are no losses at this point. Do you just kind of doubt that, or.

[A]

Well, particularly when you're private, you have a lot of flexibility in terms of where you attribute overhead, where you say how you. The Atlantic. Yes. You could have a very profitable events business and an unprofitable magazine and say the Atlantic's profitable. I don't know. I think, first of all, Atlantic's done a commendable job. I think, for a lot of other media companies, they're kind of a model of how to get into some other businesses that help to support the core written content, that they're still doing very well. But I think the prospects for that business, I mean, the funny thing about a highbrow magazine like the Atlantic is the prospects haven't been good for decades, as opposed to Vanity Fair or big consumer magazines, which were really making a lot of money in the 80s and 90s and into the 2000s, and now face a future in which there's very little profit that you can see happening.

[C]

Because all their best ads have gone to Instagram, basically. Because that's where.

[A]

Well, and because the digital ads have gone to Facebook and Google and because people aren't, with a few exceptions, people aren't paying for the publication. So whereas it's not coming from revenue from advertising, it's not coming from readers. Where is it coming from?

[B]

Yeah. So I want to just quickly, because we have you here, and it's a rare and special opportunity to ask, what on earth is this Slate plus thing that we keep on asking people to buy? At one point, Slate attempted a membership paywall model and then dropped it. And this is like plan B.

[A]

Well, the paywall, I should say, was 1997, 98. So that was in the early experimental phase of the Internet. We learned a lot doing that. We got 20,000 paid subscribers back then, which, in retrospect, was a big achievement, but not enough to pay the cost of the magazine. And we preferred the big audience. And ever since then, we've been biased towards being free because you reach a bigger audience. Slate's writers, like Jordan, want to reach the biggest audience they can reach. They don't want to be behind a paywall like the excellent Financial Times, for which I write sometimes, but which doesn't reach a big audience on the web because it's quite strictly paywalled. So what we tried to do with Slate plus, which is now 3 years old and going very strong, is to get our most dedicated readers to help support the journalism we do, and also to get certain excellent benefits, like the ability to listen to this show without ads, which, if you listen to a lot of podcasts, ends up saving you considerable time. As much as we love our advertisers, and to have that as a kind of offer for the core audience, but still keep the main content free, and that model is starting to look interesting to other publishers as well. The Atlantic has just started a membership model. The Guardian has a membership model. These are places that aren't paywalled, where the content remains free online, but where they want people to still give the money for some extra stuff.

[B]

The newest thing, which is. Which is just in the past couple of weeks that the Guardian and the New York Times have both done, is they've announced they're setting up nonprofit arms, which are actual, like 501c3 registered charities, which people can make tax deductible donations to to help support their journalism. Slate plus is not a charitable donation. Right. You're actually trying to give people something of value in return for their money.

[A]

Yeah, it's not tax deductible, and that's what they're trying to solve. I mean, I think that in some ways the Garden's taking a next step and saying, well, all right, if we're asking people essentially to give us contributions to support what we do, so in America, as opposed to in the uk, they would like those contributions to be tax deductible. In uk, they wouldn't be tax deductible.

[B]

But do you consider Slate plus revenue to be a kind of quasi contribution, or is it actually something which you think is like a compelling value proposition on its own?

[A]

I think we have both angles working in our favor. I mean, I think there's an element of conscience, particularly since the election and in the Trump presidency. I think people see independent media as under so much attack and threat that people do want to contribute to support the most. Those significant places standing up to the administration that includes the New York Times and the Guardian, Slate and the New Yorker and the Atlantic and others, independent voices. But I think we're also have been working very hard to make it a value proposition, you know, but it's not a single benefit, such as a paywall, where you must pay to get the benefit of reading the publication. It's more like the ad free podcasts, fewer ads on the site, first crack at tickets for a live event, discounts on tickets for our live events, chances to interact with Felix Salmon. You know, we do, we do the thing, we do the extra segments on the podcast and I think part of it is, you know, we, it's fun doing that stuff. It's fun talking to the little audience of the core readers on the Slate plus segments. But we don't want to make a decision between those two things. We want people to support us because it's a virtuous thing to do and because they'll get things that they want to have.

[B]

You know what, I feel like I want to have a tax policy discussion now.

[C]

Do you? Yes, there actually is some tax policy here a little bit.

[B]

No, I feel like this is the big multi billion dollar question over what on earth is going on with Amazon. And their announcement is they have basically got, I don't know, what, 6, 8, 12 US cities all competing with each other to see who can throw more billions of dollars at them. And they say, well, whoever throws the most billions of dollars at us, we are going to come into your town, build 8 million square feet of Amazon HQ and bring you 50,000 six figure salary jobs and basically transform your entire economy much as we have already transformed the economy of Seattle.

[D]

And I would say that if they could do for other cities what they have done for Seattle, that would probably be a good investment for most cities.

[C]

Yeah, I mean, there's so many questions here. I mean a lot of people have compared this to like Olympic bidding. Right. Except for maybe not quite opposite. Yeah, like, you know, except for like.

[D]

Bid to lose money.

[A]

Yeah.

[C]

I was gonna say bidding on the Olympics is just never a good idea. This, for some cities, this is, this, this could theoretically be wise. It's. There is something a little bit gross about the fact that they are very evidently asking for tax concessions and things along those lines and some subsidies, basically putting out a RFP for, you know, every major city in America that fancies itself a tech one and Canada.

[B]

Toronto is a real front runner here.

[C]

Okay, but if, if Jeff Bezos does that, he's just going to be amping up his war, handing so much fodder to, to Donald Trump in his war against him in the Washington Post. But I don't know, who knows, maybe he'd do it anyway.

[B]

I feel, I know, I mean, I feel like Toronto could be a smart move. But let's just rewind here for a minute. Anna, have you ever heard of a company Voluntarily winding up with two different headquarters in two different cities. What is going on here?

[D]

So I think this is an interesting example because they have very much tied themselves to Seattle in a lot of ways. But I think right now it's probably partly a space issue in terms of.

[B]

How much they have literally run out of space in Seattle. They have basically, to a first approximation, all of the prime office space in Seattle. They've been building more as fast as they can. They've run out of space and they've said we need more space. We can't find it in Seattle. We can't even find the labor force we need in Seattle because so many of the, you know, we've hired everyone in Seattle who we can hire. And so we trying to just persuade people to move to Seattle. Now wouldn't it be better to go to somewhere which already has a labor force with people that we want to hire? They don't need to move to Seattle. It'll be cheaper. And we can also get billions of dollars from local government. But the downside of this is two headquarters. The only other company I can think of which has two headquarters is Unilever and they hate it so much they're getting rid of that system. I mean, Jacob, does it make any sense to you?

[A]

It does seem like a sort of self inflicted wound to be in different time zones and maybe even different countries with your major headquarters. I mean the top corporate staff has to be in one place or another or they're all going back and forth all the time. And if they're going back and forth all the time, it's sort of miserable.

[D]

I've worked at a company where I was not actually at the headquarters. I was in a different office. And it is a pain, especially when you're talking about different time zones. It really is not ideal.

[B]

And I have also worked at a company, Thomson Reuters, which had more headquarters than you could count. There was New York, there was London, there was Toronto, there was Zoo Switzerland. And try. And all you wound up with was senior executives spending their entire life on aeroplanes jetting between all of these different places. And I don't. And it just doesn't. It's not efficient. It doesn't make sense.

[C]

Well, for all the reasons you're talking about it, I guess I've been kind of wondering a few things about this headquarters. First of whether or not it's really going to be a headquarters. Right. Or is it going to be a thing where they kind of. There's going to be a ton of the sort of mid level work here a lot.

[B]

They're talking about spending $5 billion and.

[C]

Yeah, but it's also a lot of money. They've said the average salary is going to be about $100,000, I think. So that suggests to me that there's going to be a lot of mid level stuff going on.

[B]

Well, I mean, they're saying they're hiring 50,000 people. You, you can't have 50,000 senior people, can you?

[C]

Fair enough.

[A]

Are they just negotiating with Seattle? I mean, they want this. You know, you do have this race to the bottom which you guys were talking about, where these states bid against each other to see who will give the richest benefits to track the company. And then they get their best offer and they take it back from Seattle and they say, what are you guys gonna do? Don't you want more jobs here? And even though, you know, people in Seattle complain about Amazon, they want those jobs, they certainly don't want to.

[B]

It's clear that Amazon's not leaving Seattle. But at this point, I feel like Seattle want the marginal extra Amazon job much, much less than almost any other city in the country.

[C]

Felix sent along a great article. When he says that they've actually run out of space in Seattle, he's like, I mean, you're not kidding. Apparently literally the Seattle Times went and looked at this and found that I think it was like 16%, almost 20% of Seattle's class A corporate real estate is taken up already by Amazon, which is more than any company.

[B]

More than the next 40 combined.

[C]

Yeah, they're like, like no other company in any city in the country takes up that much of a city's prime real estate. So it's just.

[A]

But I mean, if you've been to Seattle, they can build more buildings. They built those buildings for Amazon. They can build, you know, they can build on the other side where Microsoft is. I mean, it's all a question of zoning and regulation, whether they're allowed to build. But there's no, that's politically sensitive. There's still enough coffee in Seattle for everybody, but we have to.

[D]

And I think what's also interesting to think about here is that we're throwing around a lot of numbers, but is Amazon actually going to spend this amount of money? Are they actually going to employ this amount number of people? We do not know right now. It is very cheap for Amazon to say this and they can potentially, you know, garner, you know, tax breaks from saying this. And also good PR in the US right now by saying, look, we're bringing all these jobs, they are partly doing this because it makes Amazon look good.

[B]

Although it also makes, I feel this just horrible skeeviness about this idea that they can. I mean, on the one hand they can build a new HQ anywhere they like, anytime they like, for any reason they like. But when you politicize this and you force a bunch of cities and states to come groveling to you and tell you how much they love you, is.

[A]

That a great look?

[B]

No.

[C]

I mean it's.

[D]

Yeah, it's like a Hunger Games aspect of it that's not ideal or like a King Lear, but. But again, I think it gives Amazon an excuse to say we're creating all these jobs. Look at all these jobs we're creating.

[C]

I think you're both. It's sort of going to be in the eye of the beholder. You can make either argument. I just, I don't know. I find it. We don't know what this thing is. I guess that's what it comes down to is we really don't know. Like you said, they throw in numbers. We don't know if the hiring. We don't know what's going to be going down there. So we don't know if it's going to actually act as the sort of seed of a potential larger ecosystem like Amazon's actual headquarters has. Because if it is a bunch of more mid level stuff that's going to be.

[B]

Well, I think one of the reasons we don't know is because even Amazon isn't going to know for a few years after it builds it. It's not something they have made it pretty clear that there's going to be a bunch of choice. You know, senior managers are going to be able to choose do you want to stay in Seattle or do you want to move to X? And depending on whether X is Baltimore or Toronto or Detroit or Austin or Boston or wherever it is, people are really into Denver for some reason. Have you been to Denver?

[C]

Nice.

[B]

But there are all of these different cities and depending on which city they choose, different people will wind up choosing to move there for different reasons. There's going to be a different local skill set and it will evolve organically. I think there's a limit to how much Amazon can predict about what it's going to do.

[A]

The mayors and governors love this race to the bottom. They shouldn't because it's terrible for them. But. But first of all, they get to give speeches about how great their place is. They have, in resource constrained environments, they suddenly have resources to work with because you're paying in tax benefits. So it's not real money and somebody wins. But they love kind of bidding for the Olympics, bidding for Amazon. It's a problem of federalism that every individual is best off making the most ludicrous offer they can pull together. But the end result is a company that doesn't need subsidy ends up getting massive public subsidies.

[B]

So, Jacob, what's your. Which city do you think is in pole position here? Who do you think is going? Who's well placed to win this rfp?

[A]

I mean, Redmond, you know, I mean, if I were at Amazon, I would say what's the closest possible destination? So actually, you know, Portland or Vancouver. I mean, I wouldn't, you know, if you're going to split the management. If I were in the management, I'd say let's make it the shortest possible route.

[C]

If it weren't for the fact that Austin's just infrastructure has turned into a total clusterfuck and like the commute there is just deadly. And they have a hard time building mass transit.

[A]

No.

[B]

Uber.

[A]

Yeah, they have Uber now.

[C]

Do they?

[B]

Yeah, there was, there was a Texas wide law which re implemented Uber across all of Texas. And Austin.

[A]

Oh good. I'm going for the, I'm going for the Texas Tribune Festival, so I'll be able to get around.

[C]

But yeah, I would say, you know, going to Austin since Whole, you know, since they just bought Whole Foods and turning this headquarters into sort of their ground zero for trying to take over the US grocery industry.

[B]

That's a good point. I hadn't thought about that. That massive Austin Whole Foods headquarters could just be the center of a new Amazon.

[C]

Yeah, so I mean like, at least they'd be close together and then you could kind of, you know, work them. But at the same time, Austin, you know, has so many other infrastructure issues because it's just been growing too fast. Other than that, there's a part of me that thinks like it's going to be some tech hub that is just not too expensive so your executives who are tired of overpay won't want to buy houses can go there. So like you're talking maybe P. Pittsburgh or the Rally Durham era or because it's cheap compared to Seattle and New York and nowhere else, maybe Denver.

[B]

I have this weird feeling it's going to be either Toronto or Baltimore.

[C]

It's not going to be Toronto.

[D]

I don't think it's going to be Canada.

[C]

Don't make American mayors get up and do a song and dance routine for you and then like give it to Toronto, you just don't do that.

[D]

And if you're looking for some of the qualifications that they're talking about, about having a lot of already high tech, highly educated workers, about having a lot of mass transit, that's going to really limit which US City.

[C]

Yeah, or it could be, it could be the D.C. area because Bezos has a mansion there. I mean.

[B]

Well, no. And that's. And that's why I think Baltimore is in with the chance. Because if the bid includes a high speed rail link or even a low speed rail link, you know, extending the Red Line out to Baltimore, then that could be really re architect the entire Washington region and transform stuff.

[A]

It'll be great when it's done in 2057.

[B]

All right, I think we should have a numbers round. Jacob, since you are very well prepared, you can start.

[A]

My number is 229.

[B]

Oh, yeah.

[A]

That is the price I saw advertised for organic chicken at Whole Foods. And that is a low price for organic chicken.

[B]

That's per pound.

[A]

I'm sorry. Yes, per pound. It's $2.29.

[B]

Not for a pound of organic chicken. That's pretty good.

[A]

It's a good deal. So Amazon has immediately gone and slashed prices. I think that's cheaper than Trader Joe's. I mean, that's cheap. I thought maybe I should buy some chicken at that price. It points to their strategy and their aggressiveness in just a couple of weeks, taking over the company.

[B]

Anna.

[D]

So I have kind of a sad number. So I knew we were talking about like issues with media today. So My number is 6.3 million. This is the tax bill that is putting Cambodia Daily out of business.

[C]

What?

[D]

So this is one of the last independent newspapers still active in Cambodia and they were given this ridiculous taxpayer. I mean, this is a newspaper that's never made money. It's a nonprofit. And this is clearly just a way for the Hun Sen administration to stifle dissent.

[C]

And it's.

[D]

This is something we've actually been seeing throughout Southeast Asia with kind of a crackdown on the free press. And so this is just another really sad example of it.

[A]

And that strategy, and it's interesting, is borrowed from Turkey and Russia. One of the ways the, the regimes in those countries have been getting rid of independent media is hitting them with these unpayable tax bills, then you take them into receivership and you can give that business to one of your cronies.

[B]

My number is $2.2 billion. This is a sports pool number. This is the amount that Texan restaurateur has agreed to pay for the Houston Rockets, which I have to admit, I'd never even heard of the Houston Rockets. But the Houston Rockets play some kind of sports ball, and they played an.

[C]

Essential role in my third grade heartbreak when they beat the Knicks in the NBA Finals.

[B]

And they are now worth $2.2 billion, apparently, which is a new record for any sports team changing hands, which it breaks the record set by Steve Ballmer when he bought the Clippers. Clippers in la. And I feel like a bunch of that value, actually, going back to our previous conversation, is in the stadium tax breaks and stuff that all sports owners invariably wind up receiving.

[C]

Possibly. Yeah. And just sheer ego also. That, too. My number is 257 million, which is how much Filecoin has raised in its initial coin offering.

[B]

Is that in Bitcoin or is that in ether?

[D]

I think it's.

[C]

I think it's either. It's not legal in China, but it's the largest. It's the largest ICO yet. And the thing about this one. So we had. A few weeks ago, we had a conversation about ICOs where I think I said, friends don't let friends invest in ICOs. That was my entire contribution to the conversation. But I think for the first time, I kind of understand what this one does and why it seems like it inherently is valuable.

[B]

Okay, now we've reached the top. Yeah. Yeah. When Jordan Wiseman's talking, maybe there's something there.

[C]

Yeah, well, either that or it means. I just don't understand it. But. So the idea is that this company allows you. The idea is it's distributed storage. It's like if you have a file you need to store somewhere, this just gives you space in their, you know, in their blockchain network, and you put it on whoever's computer. You're right. You know, and that. I mean, storage is valuable.

[B]

No, it's not.

[C]

No, it's not at all.

[B]

Don't you remember that, like, Gmail gave everyone a gigabyte for free, like, 10 years ago?

[A]

Okay.

[C]

So it's totally not. There's. This is valuable.

[B]

I feel like, okay, storage was valuable 20 years ago when you spent lots of money on hard drives. I can't remember the last time anyone thought storage was valuable.

[C]

It seems like a thing that could theoretically be valuable. I'm just saying I kind of understand this one.

[B]

It's not worth $277.

[D]

Just like tulips were valuable.

[C]

All right, never mind. Maybe it was the top. That moment Right there. Everyone. You just.

[B]

And plus, it's not even storage today. When you do have to pay something not very much for storage, it's storage well into the future when storage prices have only been going down, and. And there's no conceivable way that they're ever gonna be going up.

[C]

All right, fine.

[B]

Okay. Anyway, that's it. This is the end of Slate Money. Congratulations on making it this far. Many thanks to Jacob Weisberg for gracing us with his presence. You have to listen to his podcast. It is called Trump Cast, and it comes out a lot.

[A]

Several times a week, usually Monday, Wednesday, and Friday.

[B]

You're not always the host.

[A]

No, I'm. I will have two co hosts, Virginia Heffernan and Jamel Bouie, who share duties with me.

[B]

And you, you just pick some new Trump crazy every week and dissect it and try and understand what on earth is going on in the presidency.

[A]

Yeah, we want to help people understand Trump, so we actually try to not always be right on the news, but to have different kinds of guests who we talk to in some depth. Depth. Who add some kind of insight to understanding what the hell's going on in the country.

[B]

Are you gonna get Chuck Schumer on?

[A]

He was on Isaac Chotiner's program, was pretty good, and I just heard him interviewed somewhere else. Don't know. You know, he's. I mean, you know, we have sitting politicians. No, what you need to get a great interview.

[B]

It's true. You need the. Recently. You need to wait for another three weeks, wait for Gary Cohn to get fired, and then get him on.

[A]

That's the guest. Get you on the.

[B]

That's the get. Many thanks to Dan Schrader for producing. Keep on sending us your amazing emails@slate moneylate.com. yeah. And we will just sit here waiting for the inevitable defenestration of Gary Cohen. And when that happens, we will. We. I guess we will try to get him on as well.

[C]

I doubt he'll come somehow now.

[B]

So we will talk to you next week on Slate Money.

[A]

Look what you made me do. Look what you made me do. Look what you just made me do. Look what you just made me. Look what you made me do. Look what you made me do. Look what you just made me do. Look what you just made me die.